THE Namibia Bank and Allied Workers Union and First National Bank of Namibia have reached an agreement on salary and benefit increases which will come into effect on August 20.

FNB has agreed to pay 100 per cent of the medical aid fund contributions of the lowest paid workers. Workers who fall in the middle band will receive a medical aid contribution of 65 per cent, with the aim of increasing this to 70 per cent in the next financial year.

In addition the bank will cover all annual increases by the medical aid fund. It will also refund all employees' medical aid contributions backdated from now until August 2011.

The medical aid benefit covers the principal member and spouse plus all biological children as well as all legally adopted children.

FNB will increase all employees' salary who have medical aid by an average of 5.6 per cent. Employees without medical aid will receive and annual increase of seven per cent. The bank has also agreed to pay performance bonuses up to a maximum of 7.3 per cent of the employee's annual salary.

"We opted for more but it is a fair increase in comparison with what the current market is offering," said Lawrence Ihuhua, secretary general of the Namibia Bank and Allied Workers Union.

"We were also looking at the long-term sustainability of the bank and job security for the employees," he said.